Opinion
No. C 99-4280 JCS
April 7, 2000
ORDER GRANTING DEFENDANT'S MOTION FOR SUMMARY JUDGMENT
Defendant's Motion for Summary Judgment came on for hearing on March 31, 2000 at 9:30 a.m.
For the reasons stated below, Defendant's Motion for Summary Judgment is GRANTED and this case is DISMISSED in its entirety.
I. BACKGROUND
In this action, Reggie Henderson seeks the return of a 1997 Dodge Viper, appraised at $57,000, which was seized from the front yard of a friend of Henderson's, where the car was parked, on December 17, 1998 during a search for drugs. Motion at 2. Plaintiff received a Notice of Seizure and Intent to Administratively Forfeit the Vehicle on January 7, 1999. Id. Defendant does not allege that he did not receive the notice or that he did not understand the notice. See Complaint at 2 (attached to Defendant's Motion as Appendix). The Notice stated, among other things, that a claimant could petition the agency for remission or mitigation or for expedited release of the property. See Notice of Seizure (attached to Complaint as Exhibit A). The Notice stated that the original petition for remission should be filed with the DEA's Asset Forfeiture Section, along with two copies. The Notice also provided instructions for contesting the forfeiture in the United States District Court, either in lieu of or in addition to the petition for remission. Id. The Notice stated that "[t]he claim of ownership, with either `Declaration in Support of Request to Proceed In Forma Pauperis' must be filed within twenty (20) days of the first date of publication of the notice of seizure in the edition of the USA Today newspaper referenced above." Here, publication was on January 20, 1999 and the last date to file the claim and bond was February 9, 1999. Complaint at 2. The Notice did not require the claimant to submit copies of the claim, in contrast to the petition for remission.
On February 8, 1999, Plaintiff submitted the original and two copies of a document entitled "Expedited Petition for Remission" to the DEA. See Exhibit C to Complaint. This Petition included a sworn statement by Plaintiff that he was the registered owner of the Dodge Viper at issue in this action.
The Petition was not accompanied by a cost bond. Plaintiff's counsel conceded at oral argument that, at the time of filing, Plaintiff did not intend for the "Petition for Expedited Remission" to be understood as a claim for the purpose of invoking the jurisdiction of the district court. Three days later (and two days after the deadline for filing a claim and bond had passed), on February 9, 1999, Plaintiff submitted a "Claim of Ownership" and bond — apparently without any copies — to the DEA. Complaint at 2. The Claim of Ownership was similar to the "Expedited Petition for Remission" in that it included a sworn statement by Plaintiff that he was the owner of the Dodge Viper. Exhibit D to Complaint. Plaintiff does not offer any explanation for the fact that the claim and bond were submitted two days after the February 9 deadline.
Subsequently, a series of letters was exchanged between Plaintiff's counsel and the DEA. In a February 19, 1999 form letter, the DEA stated that Plaintiff had failed to file a claim and bond within the 20-day time limit. (February 19, 1999 letter from DEA, Exhibit E to Complaint). The February 19 letter was accompanied by Plaintiff's bond — a $5,000 cashier's check. Complaint at 2, ¶ 12. On February 25, 1999, Plaintiff's counsel sent a letter asserting that Plaintiff's February 8, 1999 Expedited Petition for Remission "contain[ed] all of the information that is required for a Claim of Ownership . . . and therefore must be treated as a claim of ownership under 19 U.S.C. § 1608." (February 25, 1999 letter, Exhibit F to Complaint). The DEA rejected this contention in a letter dated April 19, 1999, stating that it had construed the "Expedited Petition for Remission" as both a Petition for Remission and a Petition for Expedited Release. Exhibit J to Complaint. In support of its position, the DEA pointed in its letter to the fact that the "Expedited Petition for Remission" did not indicate an intent to contest the forfeiture in district court and was not accompanied by a cost bond, as required. In a letter dated March 4, 1999, the DEA notified Plaintiff that he was not eligible for expedited release. Exhibit G to Complaint. However, there is no mention in the record of any ruling by the DEA on Plaintiff's Petition for Remission.
In this summary judgment motion, Defendant asserts that this Court does not have jurisdiction over Plaintiff's claim for return of the Dodge Viper because Plaintiff failed to file the claim and cost bond within the required time. Defendant further asserts that Plaintiff has raised no due process argument nor alleged any mitigating facts which might give rise to jurisdiction in this Court. This Court agrees that it does not have jurisdiction over Plaintiff's claim.
II. ANALYSIS
Pursuant to 21 U.S.C. § 881(d), forfeiture of property involved in drug trafficking is controlled by the customs laws, namely, the provisions codified in 19 U.S.C. § 1600 to 1619. Specifically, under § 1607, where property is worth less than $500,000 dollars, the agency is required to publish notice of the seizure and the agency's intent to forfeit, and to provide written notice of the agency's intent to forfeit to any party who appears to have an interest in the seized item. Where a claimant seeks to contest the forfeiture in the United States District Court, he or she may file a claim of ownership and a bond with the agency, which, if timely, must be transmitted by the agency to the United States Attorney for commencement of a judicial forfeiture proceeding. 19 U.S.C. § 1608.
Section 1608 states that the claim must be submitted within twenty days of the date of the first publication of the notice required under § 1607. With respect to the bond, the provision merely states that, "[u]pon the filing of such claim, and the giving of a bond to the United States in the penal sum of $5,000 or 10% of the value of the claimed property, whichever is lower . . ., such customs officer shall submit such claim and bond . . . to the United States Attorney . . ." However, the regulations applying this statute require that both the claim and the bond be submitted within the twenty-day time limit. 21 C.F.R. § 1316.77. More significantly, § 1609 is explicit that both the claim and the bond must be filed within 20 days, providing that "if no such claim is filed or bond given within the twenty days hereinbefore specified, the appropriate customs officer shall declare the [property] forfeited . . ." The regulations also provide that "[i]f the documents are not in satisfactory condition when first received, a reasonable time for correction may be allowed." 21 C.F.R. § 1316.76.
Once the property has been forfeited administratively, the claimant can no longer invoke the jurisdiction of the district court (except under very limited circumstances, as discussed below) and the claimant's only option is to file a petition for remission or mitigation with the agency. 19 U.S.C. § 1618; 21 C.F.R. § 1316. 79. See also Linarez v. United States Dep't of Justice, 2 F.3d 208, 211 (7th Cir. 1993) (explaining that "by initiating administrative forfeiture proceedings pursuant to 19 U.S.C. § 1607, the agency that seized the property divests the district court of jurisdiction over the forfeiture proceedings. The district court remains without jurisdiction . . . unless an interested party files a claim of interest and posts a bond with the agency within twenty days of the first publication of the notice of seizure . . ."). The statute allows the agency to take testimony on whether remission or mitigation is warranted. 19 U.S.C. § 1618.
However, in remission or mitigation proceedings, "the granting of relief is purely a matter of administrative grace. Once an administrative agency has seized property for purposes of forfeiture, the sole remedy of a claimant, absent a purely voluntary remission or mitigation, is a court judgment that forfeiture is inappropriate." Wiren v. Eide, 542 F.2d 757, 764 (9th Cir. 1976). Because remission or mitigation is considered an act of grace, "the general rule [is that] courts do not have the power to review a denial of a petition for remission of forfeiture." Marshall Leasing, Inc. v. United States, 893 F.2d 1096, 1101 (9th Cir. 1990); See also Smith, Prosecution and Defense of Forfeiture Cases (1999) at 6-24 (noting that judicial review of administrative forfeiture is extremely limited).
While judicial review of administrative forfeiture proceedings is quite limited, courts have found jurisdiction to review those proceedings under certain circumstances. First, some Ninth Circuit cases suggest that a district court might have jurisdiction over a constitutional challenge to a denial of a petition for remission or mitigation where an owner alleges that he not only was not involved in the illegal use of the property but that he took all reasonable measures to prevent the illegal use of the property. See Marshall Leasing v. United States, 893 F.2d 1096, 1101 (9th Cir. 1990) (citing to Calero-Toledo v. Pearson Yacht Leasing Co., 416 U.S. 663, 689 (1974) (stating that application of the forfeiture statutes to "an owner who proved not only that he was uninvolved in and unaware of the wrongful activity, but also that he had done all that reasonably could be expected to prevent the proscribed use of his property" would "give rise to serious constitutional questions")). There is no such claim in this case: at oral argument, Plaintiff's counsel conceded that his only challenge is that the DEA failed to comply with the statute by not accepting the "claim" and instituting judicial forfeiture proceedings. Moreover, as the DEA apparently has not ruled on Plaintiff's petition, that exception does not apply in this case.
Courts have also found jurisdiction to review administrative forfeitures where certain types of violations of due process are alleged, most notably, failure to give adequate notice of intent to forfeit and arbitrary denial of pauper status (which excuses the claimant from the bond requirement). See, e.g., Wiren v. Eide, 542 F.2d 757 (9th Cir. 1976) (holding that the district court had jurisdiction over Plaintiff's claim that the bond requirement violated his right to due process and equal protection under the Fifth Amendment where there was no procedure for calling to the attention of the agency the plaintiff's indigence), Marshall Leasing, Inc. v. United States, 893 F.2d 1096 (9th Cir. 1990) (holding that the district court had jurisdiction over plaintiff's due process claim based upon inadequate notice but did not have jurisdiction over his takings claim), Gete v. INS, 121 F.3d 1285 (9th Cir. 1997) (holding that "[a] challenge to an agency's procedures on constitutional grounds may properly be brought in federal court"), United States v. One 1987 Jeep Wrangler, 972 F.2d 472 (2d Cir. 1992) (holding that court had jurisdiction over plaintiff's claim where agency's arbitrary action had resulted in denial of due process).
Here, Plaintiff has alleged that the DEA violated § 1608 by refusing to treat the Petition for Expedited Remission as a claim and by rejecting Plaintiff's cost bond on the ground that it was submitted after the 20-day period had expired. Plaintiff has not alleged — either in his Complaint or in his Opposition to this motion — that this statutory violation rose to the level of a constitutional violation of Plaintiff's right to procedural due process. Nor does Plaintiff allege any other constitutional violation in his complaint.
Plaintiff conceded at oral argument that this Court would not have jurisdiction over this action if the agency did not violate the statute. Because the agency did not violate § 1608, this Court does not have jurisdiction over Plaintiff's complaint.
First, the DEA did not violate § 1608 when it refused to treat Plaintiff's Petition for Expedited Remission as a claim. Plaintiff's assertion that under § 1608, his Petition for Expedited Remission should have been treated as a claim on the basis of its content, regardless of whether Plaintiff intended it as such at the time, has no merit. A number of factors made it reasonable for the Agency to conclude that Plaintiff sought to invoke an administrative remedy rather than a judicial remedy with his Petition: 1) the document was called a Petition for Expedited Remission rather than a claim; 2) there was no indication from the contents of the document that Plaintiff intended to invoke a judicial remedy; 3) the document was not accompanied by a cost bond; and 4) the Petition was submitted with two copies, as is required under the regulations for Petitions for Remission. Any question the DEA might have had about what the Petition was meant to be would have been resolved when Plaintiff submitted to the DEA a claim and bond — two days after the deadline — with a letter stating that the Petition for Expedited Remission had been filed separately.
According to the DEA, it is very typical for a petition for remission or a petition for expedited release to include a declaration by the claimant stating that the property at issue belongs to the claimant. Thus, the fact that the Petition for Expedited Remission included a declaration of ownership by Plaintiff would not have provided a basis for concluding that the claimant was attempting to file a claim.
The letter gave no indication that in filing the claim, Petitioner was attempting to remedy some defect in his earlier Petition, or that that Petition was intended as a claim. In fact, Plaintiff concedes that this was not his intent at the time.
Further, to adopt Plaintiff's position that under § 1608 the DEA should construe any petition for administrative relief that includes a declaration of ownership as a claim, regardless of the claimant's intent, would lead to absurd results. Because petitions for remission and for expedited release frequently include a declaration of ownership, such a reading of § 1608 would require the agency to halt virtually every administrative forfeiture in which a petition for remission was filed, even though the claimant was not seeking judicial forfeiture. Such a result would seriously undermine the purpose of administrative forfeiture, which is to "save the government the time and expense of a judicial condemnation proceeding in cases where the value of the seized property was small." United States v. United States Currency in the Amount of $2,857, 754 F.2d 208, 211 (7th Cir. 1985); see also David B. Smith, Prosecution and Defense of Forfeiture Cases (1999) (stating that "[t]he function of the administrative forfeiture procedure is to allow the government to avoid the time-consuming, and therefore costly, necessity of obtaining a default judgment in thousands of uncontested forfeiture cases). Moreover, Plaintiff's interpretation of § 1608 would allow claimants to evade the 20-day deadline for submitting a claim and is, therefore, inconsistent with the plain language of that provision.
The Court also rejects Plaintiff's contention that the DEA failed to comply with § 1608 when it rejected his cost bond as untimely. Plaintiff does not dispute that the cost bond was filed after the twenty-day deadline had passed. Rather, he argues that the cost bond need not be filed within twenty days of the date of first publication of the notice of seizure, but only within a "reasonable time." In making this argument, Plaintiff relies upon: 1) the text of § 1608, which does not state explicitly that the cost bond must be filed within twenty days of the date of first publication; 2) the provision in 21 C.F.R. § 1316.76, stating that the agency may allow "reasonable time for correction" if the claim and bond are not in satisfactory condition when received; 3) the decision of a federal district court in Tennessee applying a similar, but not identical, forfeiture statute. Plaintiff's argument with respect to the text of § 1608 must be rejected in light of the clear language of § 1609, which requires that both the claim and the cost bond be submitted within the same 20-day time period. See United States v. Stauffer Chemical Co., 684 F.2d 1174, 1186 (6th Cir. 1982) (holding that "[d]ifferent portions of the same statute should be read and interpreted consistently with each other, avoiding conflicts"). Nor has Plaintiff presented any authority for the proposition that 21 C.F.R. § 1316.76 requires the agency to excuse the failure of a claimant to submit a bond within the required twenty-day period. To the contrary, the plain language of that regulation indicates that it applies only when a claim and bond are, in fact, received timely and found to be defective.
Finally, Plaintiff's reliance upon Epps v. Bureau of Alcohol, Tobacco and Firearms, 375 F. Supp. 345 (E.D.Tenn. 1973) is misplaced. There, the forfeiture statute at issue provided that "[i]f no claim is interposed and no bond given within the time . . . specified . . . the Secretary of the Treasury . . . must then proceed to give notice and sell the forfeited articles in a certain manner." Id. at 349 (quoting 26 U.S.C. § 7325(4) (emphasis added)). Reasoning that forfeiture statutes should be construed narrowly, the court held that it had jurisdiction over plaintiff's action for return of property where the claim had been timely filed and the bond was submitted several months later. Epps is distinguishable from this case, however, because here, the statute provides that "[i]f no such claim is filed or bond given within the twenty days hereinbefore specified, the appropriate customs officer shall declare the vessel, vehicle, aircraft, merchandise, or baggage forfeited . . ." 19 U.S.C. § 1609. The use of the word "or" rather than "and" in the statute is significant because it indicates that the failure to submit either the claim or the bond within the twenty-day period will result in administrative forfeiture. In contrast, the statute at issue in Epps provided that administrative forfeiture occurred when neither the claim nor the cost bond were filed within twenty days. Thus, the holding of Epps does not apply here.
III. CONCLUSION
For the reasons stated above, Defendant's Motion for Summary Judgment is GRANTED and Plaintiff's complaint is DISMISSED in its entirety.
IT IS SO ORDERED.